1. Field of Invention
The present invention relates generally to the financial service and banking industries, and, more particularly, to systems, program products, and associated methods for providing a line of credit optimized for a retailer to a demand deposit account or a prepaid card.
2. Background
It is known that tens of millions of consumers in the United States have either limited or no access to traditional credit, either as a result of poor or limited credit history. It is known that tens of millions of consumers have demand deposit accounts (DDA) with overdraft protection, which allows them to borrow funds. It is further known that millions of prepaid cards are issued each year in the United States. It is also known that many of the customers of prepaid cards rely primarily on cash and a prepaid card account for their personal finances; these customers, for example, often do not have a traditional checking, savings, or other bank deposit account, and they usually do not write checks. It has been acknowledged by many that those without bank accounts and who often rely on prepaid cards, as well as those routinely using overdraft protection for short-term loans, may be underserved. These customers are typically not easily able to access credit through traditional banking channels, though they may have an ongoing relationship with a prepaid card issuer, for example.
Even when credit is available to these customers, the costs associated with traditional lending products, including interest, fees, and penalties, are often expensive and can ultimately contribute to the financial situation that negatively impacts the consumer's access to credit. For example, a typical overdraft fee charged by a bank for “bounced” check is often larger than the overdraft amount itself.